September 29, 2008

Car rental agencies typically offer four different types of insurance coverage at the desk when you arrive to pick up your rental car. Many of these things may be covered by your personal or business auto insurance plans, so check the policies you already have against what the rental agency is going to offer you beforehand to determine what you may or may not want to pick up when you get there.

  1. Damage Waivers – The Damage Waivers offered at the desk are generally called Collision Damage Waivers (CDW), Loss Damage Waivers (LDW), or Physical Damage Waivers (PDW). These are technically not the same as the collision insurance coverage you get from your own personal or business insurances policies. CDW or LDW waives the right for the rental car agency to recover money from you the renter if the rental vehicle is damaged or stolen, in return for a daily fee tacked onto your rental car bill. This will NOT cover damages made to someone else’s car during your rental period – also known as third party damages. Your personal or business auto insurance will normally cover this when you are driving a car you’ve rented.
    Some Damage Waivers offered by the desk can become void in certain situations, such as if it is determined you drove in a negligent manner or you drove the rental car outside of the geographical limits your rental contract specifies, so be sure to keep an eye on that.
  2. Liability Insurance Supplements (LIS) – A rental agency may offer you supplemental liability coverage, which is coverage that will pay over and above what your personal or business insurance already covers. If you do not already have personal liability coverage, then you should seriously consider purchasing it from the rental agency.
  3. Personal Accident Insurance or Coverage (PAI) – This type of coverage provides you with a one-time payout for you or a passenger in case of death or maiming from a car accident, and is usually covered under your own auto or health policies, so you likely do not need to buy this at the desk.
  4. Personal Effects Coverage or Personal Property Insurance – This type of coverage pays you if something is lost or stolen from your car. Opting for this is something you’ll have to decide for based on personal need, and your existing coverage probably doesn’t include it, so if you want it, you will likely need to get it from the desk.

And please remember that while many of these things may be already covered by your existing insurance, it’s best to double check before you leave to make sure.

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